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Jitters hit stocks ahead of Fed and earnings

© Reuters. FILE PHOTO: The screen shows the Nikkei stock average and stock indices outside of a Tokyo broker

By Stanley White

TOKYO (Reuters) – Asian stocks barely moved on Tuesday as caution over the Fed’s meeting and corporate earnings offsets optimism about the global recovery from the COVID-19 pandemic.

The broadest MSCI index for stocks in Asia Pacific outside Japan rose 0.01%. Australian stocks fell 0.19% and China stocks fell 0.08%. Tokyo stocks were down 0.23%.

The e-mini stock futures rose 0.2%.

The entire region fell by 0.05%, the German by 0.08% and the futures by 0.07%, indicating a smooth start to the European session.

Oil rallied after major oil producers stuck to their demand forecasts. However, downside risks remain in India, the world’s third largest oil importer, due to rising COVID-19 cases.

Analysts said some investors may take profits on stocks, but sentiment remains positive due to rising coronavirus vaccination rates in many countries.

“There are two reasons to be positive about stocks and commodities,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui (NYSE 🙂 Asset Management Co in Tokyo.

“The global economy is likely to continue to strengthen and many advanced economies are looking to reopen because of advances in vaccination.”

Despite the hopeful signs, a bullish session on Wall Street failed to inspire Asian markets. The S&P 500 and Nasdaq closed at record highs on Monday, fueled by heavyweight growth stocks ahead of a flurry of earnings reports this week. The end 0.18% lower.

In expanded trading, Tesla (NASDAQ 🙂 fell about 0.4% even after the electric automaker beat Wall Street expectations for first-quarter revenue.

Sentiment for stocks in many markets has steadily improved this month as rising vaccination rates are expected to allow more economies to resume normal activity.

One problem area, however, is India, which is grappling with an increase in coronavirus infections that have overwhelmed its healthcare system.

Many investors sat on the sidelines ahead of the Fed’s political meeting ending Wednesday, where the US Federal Reserve is expected to confirm that it will maintain its loose monetary policy to strengthen the economy.

Bond traders watch an auction of seven-year US Treasury bonds valued at $ 62 billion on Tuesday.

The Treasury Department saw very weak demand in a seven-year debt auction in February that sparked brutal market sell-offs around the world. The notes also saw lukewarm, albeit improved, demand in March.

Before the auction results, the seven-year returns rose to 1.2689% while the 10-year benchmark returns rose slightly to 1.5774%.

The dollar was constrained in a tight range as traders avoided taking large positions ahead of the bond auction and the Fed meeting.

The yen retreated from a seven-week high against the dollar after the Bank of Japan cut its consumer price forecast just a week after Tokyo and Osaka entered their third state of emergency over a surge in coronavirus infections.

rose 0.74% to $ 62.37 a barrel and rose 0.72% to $ 66.12 a barrel. However, the rise in the price of oil could be limited due to concerns about the return of travel restrictions in response to the rise in the Indian coronavirus.

was changed little at $ 53,918. The world’s most popular cryptocurrency rose nearly 10% on Monday after five consecutive days of loss. JPMorgan Chase (NYSE 🙂 is reportedly planning to offer a managed bitcoin fund.

Bitcoin was down almost a fifth from its all-time high earlier this month.

Competing digital asset, Ether, was flat at $ 2,528.

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